2023 (3) TMI 1212 - AT - Service Tax

Refund of service tax - Construction of Complex Service - mutuality of interest - construction of complex service provided by appellant SHRINANDNAGAR V CO OPERATIVE HOUSING SOCIETY LIMITED to its members of the society - relationship of service provider and service recipient between cooperative societies and its members - HELD THAT - This tribunal in the order dated 30.07.2009 2009 (7) TMI 135 - CESTAT, AHMEDABAD decided the matter on merit in the appellant s favour holding that the appellant is eligible for refund however, it was remanded only for the examining the aspect of unjust enrichment, where it was held that in the absence of a contractor hired by Society and nature of the transaction between the parties and in the light of definition of service and its liability for service tax, the transaction in this case cannot be considered taxable. With the above orders of the tribunal as well as the High Court, the issue on merit that whether the service of construction of complex provided by the appellant s cooperative housing society to its members is eligible to service tax or otherwise has been settled in favour of the appellant. The impugned order is not sustainable - Appeal is allowed.

Summary

Issues:
The judgment involves the issue of whether the construction of complex service provided by a cooperative housing society to its members is liable for service tax.

Issue Analysis:
The appeal was filed against the Order-in-Original confirming the demand of service tax under the category of 'Construction of Complex Service'. The appellant argued that due to the mutuality of interest between the cooperative societies and their members, there is no relationship of service provider and service recipient, hence not liable for service tax.

Appellant's Argument:
The appellant's representative highlighted that a previous tribunal order had allowed a refund after considering the merit in detail, and the High Court had upheld this decision. They contended that the service between the cooperative housing society and its members is not liable for service tax based on legal precedents.

Revenue's Response:
The Assistant Commissioner representing the revenue reiterated the findings of the impugned order, maintaining the position that the service is liable for service tax.

Tribunal's Decision:
The tribunal examined the submissions and records, emphasizing that in cases where the cooperative societies construct residential complexes without engaging a contractor, the transaction is between the society and its members, not involving a taxable service provider. Citing relevant circulars, the tribunal concluded that in the absence of a contractor and considering the nature of the transaction, the service in this case cannot be considered taxable.

High Court's Decision:
The High Court dismissed the revenue's appeal, noting that the issue was substantially covered by a previous decision involving a developer. The court declined to apply a later explanation retroactively, leading to the dismissal of the tax appeal.

Final Judgment:
Based on the settled legal position and previous orders, the tribunal set aside the impugned order, allowing the appeal with consequential relief if any, in accordance with the law. The judgment in favor of the appellant was pronounced in the open court on 24.03.2023.